Sacramento daily record-union., 1887-08-09
THE RAILROAD INQUIRY.
MORE FACTS CONCERNING THE
CENTRAL PACIFIC.
n. Greene Curtis Testifies AbOut Mill
ler's Memoranda-Th Cost
of Building-Etc.
ESPECIAL DISPATCH TO THE nrooRD-uMos.l


SAN FRAN Isco, August Sth.-Judge \. Greene
Curtis, of Sacramento, was the first witness ex-
amined to-day by the Pacific Railroad Com
mission. He was asked concerning the 1acts
covered by the testimony of John Miller ,giyen.a
few days since. He said he first became ac-
a,lainted with John Miller in the fall of 1879.
Miners wife came to him and asked him to de-
fend Miller, who had been indicted for embez-
zliDg or misappropriating the funds OF the Con-
tract and Finance Company. This was after
Miller had made his settlements with the com
pany The Grand Jury had interfered and in.
dicted Miller. The witness was asked
whether he had ever had any interviews with
the railroad men concerning the prosecution OF
Miller He said he called on Mark Hopkins and
asked him whether the railroad company in
tended to prosecute Miller. Hopkins said the
company did not intend to spend any money to
convict Miller. It's officers would respond TO
subpenas and testify as other citizens. The wit
ness then called on Governor Stanford and
asked him the same question. The Governor
did not answer at once, when the witness re,
marked that perhaps II the company prosecuted
Miller he would say things likely to damage the
personal characters of the Central Pacific Di-
rectors. Stanford legarded this as threat, and
with some heat, responded that II Miller in
tended TO attack the railroad men personally he
would employ the best lawyers in the State TO
convict him. The witness said :" All right"
and departed. This was all the interview he
had with the railroad men concerning Giliers
case.
The witness said he had never been employed
by the Central Pacific IN any capacity whatever,
though he has always been personally very
friendly with Stanford, Huntington. Hopkins
and Crocker in fact, he served in the Legsla-
ture in 1861 with Crocker
Mr. Anderson asked witness concerning the
memorandum intrusted to him by Miller in
1875, which purported to be abstracts of the
books of the Contract and Finance Company.
Witness said the papers given him by Miller,
and which he had destroyed few years ago
han fhax-
be used in the trial, such as Ask Croker this,
and " Ask Stanford that which, of course,
could not be asked on a trial for embezzlement.
The questions in many cases contained figures,
but where Miller got them he did not know. AS
they were of no use TO him he had not inquired
where the figures came from. They might have
been obtained from the Contract and Finance
Cempanys looks. After the acquittal of Miller
he burned all these papers up considering they
Were Of no further use 10 anybody. The witness
said he met Miller on the street in Sacramento
a few days ago, as testified by that gentleman,
but nothing had been said ABOUT these papers.
Miller said he would probably be called before
the Commission. and asked the witness what he
should do. The witness told him if he was sub
penaed to obey. Nothing was said about the
destroyed papers. Miller was mistaken in his
statement that there had been any conversation
concerning these papers.
COST OF BUILDING THE c. P. p. r.
E, H. Miller, Jr., Secretary of the Central Pa
cific Railroad Company, was next placed on the
stand and presented statement of the cost of
construction of the Central Pacific road from
Sacramento, 600 miles, to Promontory Point.
made up from the company's books. 1t showed
the amount in cash. stocks and bonds paid each
contractor. 1t was made up by his clerk, and
although he had not examined all the details,
he had no doubt 1t was accurate.
Mr.; Little asked why all the statements pre-
pared stopped at Promontory Point, forty seven
and a half miles this side of Ogden. The wit
ness said the Union Pacific built to Promontory,
and by subsequent arrangement sold the road
between Promontory and 9gden to the Central
Pacific. The cost of this piece of road was 81
$40 600 but with that the Contract and Finance
Company had nothing to do. The Central Pa
citie Company expended S75l SOS in paralleling
the road from Promontory east. The Union Pa
cifc Company graded Tor some distance west of
Promontory, parallel with the Central Pacific.
The parallel work in both cases was a dead loss
to the companies concerned. The statement
showed that the total cost of constructing the
Central Pacific to Promontory was s61, ,299 600 :
paid the contractors in stock, SIS 75 $50 63; paid
the contractors in bonds, 500, 900; paid in cash.
So ,397, lS5. The payments of stock were gen
orally at par. The S2,Si0,000 paid the Onion
Pacific tor its for y-seventy and a half miles of
road was in first mortgage bonds and United
States per cents. The contractors from sec
tons y to 81 were, he believed, paid in stock at
so cents on the 81.
THE LETTING OF CONTRACTS.
The witness was cross examined by Mr. An
derson concerning the details of this statement
and concluded by reading reports of ofcommittees
tral Pacific Company to recommend changes
IN the policy OF the company in letting con-
tracts, and in relation to the work done by Chas
Croker & Co.. and subsequent by the Contract
and Finance Company, which was offered in evi-
dence. These reports were made by Hopkins
and Miller and Stanford, Hopkins and Miller at
different times, and one of them recommended
that the contracts be let to the Contract
and Finance Company, on the ground that
1t was best equipped to perform the
work satisfactorily and expeditfously. After
la,asf aff
Chss. Crocker & Co were turned over to the
Contract and Finance Company, He did not
understand then that the firm of Chas. Crocker
Il Co was composed of Crocker, Huntington
Hopkins and Stanford, but had learned that
since. The prices charged under the CON
tracts let to Charles Croker & Co. were
at the time they were made, be believed, reason
able. He explained that estimates were first
prepared by the engineers, who surveyed the
work to be done, and upon these the contracts
were based. The great cost of the work at the
having to be made in the hard rock of the
side of the mountain. Several tunnels were
drilled through solid rock as hard as iron.
Regarding the details of the work. Mr.. Miller,
not being an engineer, could give little infor-
nation.
The first contract was let to the Contract and
Finance Company at a meeting of The Board of
Directors held on December 3, 1867. There were
present ut the meeting Leland Stanford, Z. b.
Crocker, Mark Hopkins and the witness. The
terms of the contract, as he recollected them,
was to build and equip the road from the State
line eastward. furnish all materials shops
round-houses, etc, at $4,000 per mile, one-half
to be paid in cash and one-half in stock of the
cred at par.
INCREASE OF CAPITAL STOCK, ETC.
As to the work done by the Contract and
Finance Company, the custom was to order
payments upon satisfactory vouchers being pre-
sented He remembered auditing a bill of
4, n for - fOr
work done outside of the contracts He could
not remember exactly what the work was for,
but the firm did great deal of work outside of
its contracts, aggregating over 81, COCOON In
some cases this was for building wagon roads
connecting with the stations, by which supplies
could be transported, and for snow-sheds.
In July, 1865 the capital of the Central Pacific
Company was increased to S100,000,O00, and Alr
Miller was asked the cause of this He said
the laws prohibited any corporation from incur
ring debts in excess OF the par value of its stock
and the increase was had to enable the com panY
to run further in debt The question of increase
was submitted to the stockholders and acted on
favorably.
Extra work amounting to 81, ,021, ,7l2 IS. pre-
sented by the Contract and Finance Company
was presented and ordered paid, which, the
witness said. was for building snow-sheds pur-
Chasing wood, sinking artesian.wells and pros
pecting for coal.
same subject, Mr.. Anderson asked: "Did Hunt
ington ever tell you that the money had been
used to defeat legislation at Washington
Mr.. Miller" He never did
% Did you vote TO purchase the California Pa
cic Railroad and certain steamers for $3.50, ,000?'
Il did,
Were Stanford, Hopkins and others inter
ested?"
They were l think they owned all the stock
Anyhow, they held control"
"Did these boats pay?'
don't think they paid operating expenses,
except by keeping OFF opposition boats"
Are you familiar with various leases of aux
iliary lines
"Yes, SIR
What was the result of leases of the North
ern Railway?
al don't know but think it was profitable
for the Northern Pacific"
Mr.. Miller, by what method should differ
enees between the Government and the Central
Pacific Railroad be setted?
The Government in justice to the people and
the company should wipe out the debt to day,
Qaughter.) or should require nothing more than
the principal to be paid in fifty years.
Considering the paying capacity of the
roads. what can your company payT
Six or seven hundred thousand a year"
What are the earnings of the aided lines ~
"They may be 81. 800 600 year"
In concluding, witness Miller was instructed to
prepare a statement of the gross receipts of the
central Pacific Railroad Company from the year
adjourned till TO morrow.